Financial condition of most of the local bodies, especially municipalities, in the country is shaky and they need to initiate measures to improve it, Union Urban Development Minister M Venkaiah Naidu said here today.

"Most of our local bodies, specifically the urban bodies, are in a bad shape financially wherein they are becoming insolvent," Venkaiah said at his felicitation programme organised by the Vijayawada Municipal Corporation.

He said most of the municipalities are unable to pay salaries to their staff in time and also cannot provide quality service to citizens.

"In last 67 years, it has become a common feature that heads of the urban bodies are making representations seeking funds for development whenever a minister visits their town or city," the minister said.

Venkaiah said he was surprised to know that even a "big municipal corporation like Vijayawada has failed to pay salaries of its staff for two months."

"The corporation should take initiatives like imposing new taxes for providing services to people. People will have no qualms if they are asked to pay more in return of better and timely service. Good governance and transparency create confidence among tax-payers so much so that they voluntarily come forward to pay the taxes," Venkaiah said.

At another function, Venkaiah said the Centre is trying to usher in financial reforms to sustain growth.

"The Union government wants to raise the FDI cap in insurance sector only with an intention to widen the sector.

As of now, only 4% of our population has insurance coverage.

Our government is contemplating a new scheme to bring everyone under the ambit of insurance," he said.